RIGA, March 26 (Reuters) - The Latvian economy is seen shrinking 6.5%
this year due to the spread of the new coronavirus and the decline
could be even sharper should global efforts to curb the pandemic fail,
the country’s central bank said on Thursday. The Bank of Latvia,
whose governor has a seat in the European Central Bank (ECB) Governing
Council, also said in a statement to Reuters that inflation was seen
running at only 0.5% this year, well below its previous forecast. PHOTO GALLERYIn
its previous outlook, from December last year, the central bank had saw
the Latvian economy expanding 2.6% in 2020 with inflation reaching
2.4%. “...these
forecasts are modeled in a time of great uncertainty and they might be
corrected substantially if the global efforts to restrict the spread of
the coronavirus do not succeed,” the bank said. The central bank
also said that the measures implemented by the Latvian government would
be key to reducing the effects of the crisis. Latvia,
which has confirmed 244 cases of the new coronavirus, has canceled all
international flights, shipping, railway and bus traffic until mid-April
and banned all public events and gatherings of more than 50 people. The
country’s shopping centres and supermarkets have also been temporarily
closed over weekends. (Reporting by Gederts Gelzis; editing by Niklas
Pollard)